Japanese automakers such as Toyota, Mazda, Honda, Suzuki, and Yamaha have seen a significant dip in their stock prices after the country’s transport ministry found false data used for certifying certain models. Toyota, the largest carmaker in Japan, lost $15.62 billion in market value last week alone as its shares fell over 5.4%, but the stock is recovering. Mazda, the second largest automaker, also suffered losses with a 7.7% drop in shares and a market capitalization loss of $511.8 million. Honda, Suzuki, and Yamaha were also affected, with their shares falling between 0.3% and 5.75%.
The Ministry of Land, Infrastructure, Transport and Tourism found irregularities in certification applications by all five automakers, leading to a widespread inspection of their testing processes. Toyota and Mazda were found to have falsified vehicles used in crash tests, leading Toyota to temporarily halt shipments and sales of three models. Toyota’s Chairman Akio Toyoda apologized for the misconduct and admitted that seven models were tested using incorrect methods. Mazda also suspended sales of two models, although customers were assured they could continue driving their cars.
In response to the scandal, all five automakers have seen their stock prices rise on Monday with Toyota up 1.7%, Honda up 2.13%, and Mazda up 1.7%. Suzuki and Yamaha also experienced marginal increases. The transport ministry plans to conduct on-site inspections of the companies involved to ensure compliance with standards. This investigation was prompted by Toyota’s Daihatsu unit halting shipments of all vehicles in Japan and overseas due to safety concerns. Daihatsu had previously admitted to rigging side-collision safety tests for 88,000 small cars, with most being sold under the Toyota brand.
The revelation of false data used in certifying certain models has shaken the confidence of investors and customers in Japanese automakers. The companies’ stock prices suffered last week as the extent of the misconduct was revealed by the transport ministry. Toyota and Mazda have taken steps to rectify the situation by halting sales of affected models and issuing apologies to stakeholders. The other automakers involved are also under scrutiny and are cooperating with the ministry’s investigation to ensure compliance with safety standards. Customers have been reassured that they can continue driving their cars despite the test data irregularities.
Moving forward, Japanese automakers will need to rebuild trust with consumers and investors by implementing stricter testing processes and ensuring transparency in their operations. The scandal has highlighted the importance of adhering to regulatory standards and conducting thorough testing to uphold the safety and integrity of their vehicles. The companies involved will likely face legal and financial consequences as a result of the false data certification, but by taking corrective action and demonstrating a commitment to compliance, they can begin to restore their reputation in the market.
